NZ stocks: Top 40 plunges to new year low

6.00pm

The sharemarket's Top 40 index plummeted to a 2003 low, taking its cue from negative offshore markets.

The NZSE-40 capital index was down 15.55 points, or 0.8 per cent, to 1923.81 on turnover worth $56.2 million.

War fears were blamed for the slide, prompting comments that the wave of optimism sweeping the sharemarket since New Year was tapering off.

"There's little reason for investors to be buyers with a wait-and-see attitude prevailing," Direct Broking equities manager Brett Wilkinson said.

"It would be fair to say that investors might not have realised exactly how negative the Iraq situation would be."

He felt the Top 40 index would find more sustained support around the 1990 level.

Among the few rises today was Contact Energy, up 11c to 451, as it continued to benefit from prospects of higher energy prices.

Telecom topped the turnover, down 4c to 445 on $14.8 million worth of shares.

But it was retail shares which were punished the most -- despite, or in the Warehouse's case because of, strong December quarter retail sales data out today.

The Warehouse -- which recently disappointed the market with lower-than-expected second quarter sales growth and a flat annual profit warning -- tumbled 22c to 568, its lowest level since November 2001.

Briscoe fell 14c to 241, even though its Christmas sales were good. Mr Wilkinson said there was a suspicion that the sales were one-off, benefiting from the stronger currency.

"The retail sector has been one of the glamour sectors in the Kiwi market. Both Briscoes and the Warehouse were trading at the high end of their fundamental values, so any hiccup would bring a strong downward re-rating."

Other retailers included Pacific Retail Group, down 11c to 244, Michael Hill, down 15c to 485, and Hallenstein Glasson down 24c to 266.

Hallenstein Glasson advised today that sales for the half year ended February 1 were 2.5 per cent higher than last year but that its net profit before tax was likely to be flat or marginally below last year's.

There was a flurry of results today, including Fletcher Forests, which reported a welcome return to profit in the December half year, a net profit of $4 million against a $302 million loss a year ago.

However, the company warned of a tough second quarter ahead and forecast a similar full year result to last year. Fletcher Forest head shares were down 4c and its preference shares were down 3c, both to 110.

Cinema firm Sky City Leisure, formerly Force Corp, fell 20c to 180, while its convertible notes climbed 10c to 200, in line with comments from the company's directors indicating the value of shares to its notes.

Sky City Leisure returned to profit in the December half year, posting a $1 million net profit against a $5.5 million year ago period loss. Its major shareholder, Sky City Entertainment, fell 23c to 831.

AMP skidded to a new low of 865, ending down 25c to 870, after falls overnight in the British FTSE-100 index.

Agricultural equipment maker Skellmax was steady at 109 after posting a $6.3 million after tax profit for the half year to December, 15 per cent ahead of its pro forma figures for last year.

Vertex rose 3c to 158 after two days of competing bidding for large stakes in the company.

Falls completely outweighed rises 71 to 28 on 132 stocks traded.

On Wall St, key indexes in the US fell to four-month lows on heightened war fears and securities fears at home.

The Dow Jones industrial average fell 84.94 points, or 1.08 per cent, at 7758.17. The broader the S&P 500 slipped 10.52 points, or 1.27 per cent, to 818.68, while the technology-laced Nasdaq Composite Index eased 16.52 points, or 1.28 per cent, to 1278.94, marking its lowest close since October 17.

The Dow and S&P closed at levels unseen since October 10 when they sank to five-year lows in trading today.

- NZPA